Kaiser Reef Ltd (ASX:KAU, ASX:) has cut the ribbon on a record production quarter and kicked off a major power upgrade at its A1 Gold Mine in Victoria.
The gold stock generated 3,500 ounces from July to September — a considerable increase on the previous quarter’s approximate 2,500-ounce production.
Overall, Kaiser said the A1 asset had returned profitable operational cashflow over a full year and was showcasing improving gold production rates and margins.
However, as the mine reaches its production limits, focus has turned to a power upgrade that will boost the gold camp’s profile.
Power upgrade underway
A1’s power upgrade is budgeted to cost around $1.5 million and take four months to install.
Work on the cards includes drilling a 13.5-centimetre infrastructure hole for cables and refurbishing other infrastructure, including transformers and substation installation.
As such, A1’s operations are not expected to be majorly impacted by these activities.
Looking ahead
The power upgrade and improved production metrics come as Kaiser considers A1’s future prospects.
“Kaiser has identified a major production opportunity and we believe that the production profile at the A1 Mine has to potential to increase substantially once the power constraints have been addressed,” the company stated today.
“In addition, as the operations go deeper, we are seeing higher grades that will also potentially enhance the production profile.
“In fact, the month of August returned an estimated 18 g/t gold grade, which is approaching our long-term target grade.
“An increased production rate is also expected to see unit costs fall across the business units and improved our margins.”
Development potential at Union Hill
Beyond the A1 asset, planning continues at Kaiser’s Maldon gold camp, where the company is hoping to bring its second mine into production.
The Union Hill mine at Maldon, which has historically produced 2.1 million ounces of gold at 28 g/t, is near a gold processing plant, comes with a mining licence, existing work plan and mining permits, decline, power and ventilation infrastructure and defined, open-ended resources.
As such, Kaiser believes that Union Hill is likely to be the next significant gold mine to be commissioned in Victoria.
Preliminary engineering and drill planning is underway and work will include drill planning, second egress planning, power and ventilation investigation and update work as required.
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